Munich Re Gives Five-year Performance Guarantee Insurance for LED Modules

German reinsurance group Munich Re said that it will provide insurance coverage for US lighting company Xicato. The company provides customers with a five-year performance guarantee on its light-emitting diode (LED) modules for colour consistency and lumen maintenance. Munich Re will now assume a portion of the financial risk the guarantee entails.

Munich Re added that despite higher initial costs, LED lights, which contain a semiconductor light source, are overall much less expensive than other light sources because of their longer service life and energy savings. Industry studies forecast that sales will increase due to the ecological, economic and digital control benefits of LED lighting compared to conventional light sources and to new laws.

Until now, LED warranties have generally covered catastrophic failure and workmanship issues for a period of one year. The Xicato warranty, backed by Munich Re, is the first of its kind to address real market concerns – the ongoing integrity of the light from an LED source for five years for both colour consistency and lumen maintenance.

The reinsurer added that the solution is the first of its kind in the energy consumption sector and complements the range of performance guarantee coverages which have in the past primarily applied to renewable-energy production and green technologies. With this coverage, Xicato has the advantage of being able to partially relieve its balance sheet of the long-term, technical guarantee risk and use the capital thus freed up for purposes such as investment.


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